Obama must take action

Democrats now fear President Obama will lose to Mitt Romney, while economists are predicting continued sluggish growth on top of contagion from a deepening crisis in the eurozone. For Obama there is only one thing left to do — face the coming “fiscal cliff” of December, when $8 trillion in spending cuts and expiring tax cuts threaten a double-dip recession, and face it now.

There are plenty of seasoned legislators on Capitol Hill who have said all year that the lame-duck, a limited five-week period between Election Day and Christmas Eve, is the only time when Congress could ever act on the expiration of all the Bush tax cuts, the AMT patch, the Medicare “doc-fix,” unemployment insurance, the payroll tax cut and a host of other tax credits, with the $1.2 trillion in sequestration cuts both parties supported in the 2011 debt deal and now want to undo set to kick in on Jan. 1. Add the possibility of a debt-ceiling increase, expected as well. Partisans on both sides are too dug in to compromise now, and remain optimistic the election will produce some sort of governing mandate that will yield a swift result. 

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Meanwhile, the already grim estimates for growth are likely to worsen — some unemployed workers have already received their last checks, Pentagon planners are already making cutbacks in advance of January and of course Europeans are buying fewer and fewer U.S. goods. Companies are feeling it, and at the same time they have no idea what their tax rates will be in 2013. Why in the world would they make new hires?

Just this week we learned that median household net worth has dropped nearly 40 percent between 2007 and 2010. Top Democrats have warned the Obama campaign in a Democracy Corps polling memo that the president must change to a message that “contextualizes the recovery” because voters “know we are in a new normal where life is a struggle — and convincing them that things are good enough for those who have found jobs is a fool’s errand.”

Asking the GOP to come to the table would drag Romney into a debate he has assiduously avoided — to name what loopholes to cut and what programs to scratch instead of the sequestered defense cuts. The push would also force the Republican Party — with former Florida Gov. Jeb Bush and Sen. Lindsey Graham (S.C.) this week conceding that sometimes tax-cutting pledges prevent governing — into a potentially divisive fight about taxes. Should Republicans resist negotiating now , particularly since House Speaker John Boehner (R-Ohio) said there is no need to wait on finding more spending cuts for a debt-ceiling increase, they would have to deny the urgency of the problem in order to continue delaying a deal. 

Obama should not present his own bill, but ask both parties in Congress to produce a plan. He needs to make clear to the public he is no longer selling his “to-do list,” or asking for stimulus or state aid, but that he is trying to cut the deficit, to cut taxes and to cut a deal that eluded him last year. Finally, that he is trying to compromise and trying to lead. Considering that Obama refused to adopt his own commissioned “Simpson-Bowles” debt-reduction plan, it would be something of a faux leadership moment, but anything is better than what Obama is doing now. 

If the president doesn’t understand why he should push for a solution now and not later, why doing so is critical to the health of our economy and his best chance to make the case for his own reelection, then he won’t win his job back — and shouldn’t.

Stoddard is an associate editor of The Hill.